Correlation Between FibraHotel and Companhia Siderrgica
Can any of the company-specific risk be diversified away by investing in both FibraHotel and Companhia Siderrgica at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FibraHotel and Companhia Siderrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Companhia Siderrgica Nacional, you can compare the effects of market volatilities on FibraHotel and Companhia Siderrgica and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FibraHotel with a short position of Companhia Siderrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Companhia Siderrgica.
Diversification Opportunities for FibraHotel and Companhia Siderrgica
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FibraHotel and Companhia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Companhia Siderrgica Nacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Siderrgica and FibraHotel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FibraHotel are associated (or correlated) with Companhia Siderrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Siderrgica has no effect on the direction of FibraHotel i.e., FibraHotel and Companhia Siderrgica go up and down completely randomly.
Pair Corralation between FibraHotel and Companhia Siderrgica
Assuming the 90 days trading horizon FibraHotel is expected to generate 0.85 times more return on investment than Companhia Siderrgica. However, FibraHotel is 1.17 times less risky than Companhia Siderrgica. It trades about 0.03 of its potential returns per unit of risk. Companhia Siderrgica Nacional is currently generating about -0.01 per unit of risk. If you would invest 762.00 in FibraHotel on September 2, 2024 and sell it today you would earn a total of 138.00 from holding FibraHotel or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FibraHotel vs. Companhia Siderrgica Nacional
Performance |
| Timeline |
| FibraHotel |
| Companhia Siderrgica |
FibraHotel and Companhia Siderrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Companhia Siderrgica
The main advantage of trading using opposite FibraHotel and Companhia Siderrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel position performs unexpectedly, Companhia Siderrgica can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Companhia Siderrgica will offset losses from the drop in Companhia Siderrgica's long position.| FibraHotel vs. Lloyds Banking Group | FibraHotel vs. United States Steel | FibraHotel vs. Capital One Financial | FibraHotel vs. Micron Technology |
| Companhia Siderrgica vs. First Majestic Silver | Companhia Siderrgica vs. Ross Stores | Companhia Siderrgica vs. Samsung Electronics Co | Companhia Siderrgica vs. DXC Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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